2001 Legislation
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HOUSE BILL NO. 234 – Vintner/winery, distributn agreemnt

HOUSE BILL NO. 234

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Daily Data Tracking History



H0234...........................................................by BUSINESS
VINTNER/WINERY - Amends existing law to provide for terms of compensation
in the event a vintner, winery, importer or dealer terminates, cancels or
refuses to renew a distribution agreement with a distributor.
                                                                        
02/14    House intro - 1st rdg - to printing
02/15    Rpt prt - to Bus

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 234
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE COUNTY OPTION KITCHEN AND TABLE  WINE  ACT;  AMENDING  SECTION
  3        23-1328A,  IDAHO CODE, TO PROVIDE FOR TERMS OF COMPENSATION IN THE EVENT A
  4        VINTNER, WINERY, IMPORTER OR DEALER  TERMINATES,  CANCELS  OR  REFUSES  TO
  5        RENEW  A  DISTRIBUTION  AGREEMENT WITH A DISTRIBUTOR AND TO MAKE TECHNICAL
  6        CORRECTIONS.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Section 23-1328A, Idaho Code, be, and the same is  hereby
  9    amended to read as follows:
                                                                        
 10        23-1328A.  PROHIBITION OF CERTAIN TRADE PRACTICES BETWEEN VINTNERS, WINER-
 11    IES,  IMPORTERS  OR DEALERS AND DISTRIBUTORS -- COMPENSATION UPON TERMINATION,
 12    CANCELLATION OR NONRENEWAL. (1) It shall be unlawful for any vintners, winery,
 13    importer or dealer, directly or indirectly, or through an  affiliate,  subsid-
 14    iary, officer, director, agent or employee:
 15        (a)  To  require, by agreement or otherwise, that any distributors engaged
 16        in the sale or distribution of wine in the state  of  Idaho  purchase  any
 17        such  wine or other distributed products from such person to the exclusion
 18        in whole or in part of wine or other products made or  imported  by  other
 19        vintners, wineries, importers or dealers;
 20        (b)  To  induce, by any means, any distributor engaged in the sale or dis-
 21        tribution of wine to purchase from or distribute the wine or  other  prod-
 22        ucts  of  any  vintner, winery, importer or dealer to the exclusion of the
 23        wine or products of other vintners, wineries, importers or dealers by  any
 24        means,  including, but not limited to, the vintner's, winery's, importer's
 25        or dealer's acquisition of any interest in the distributor's  license,  or
 26        by  acquiring  any  interest in the real or personal property owned, occu-
 27        pied, or used by the distributor;
 28        (c)  To discriminate in price, allowance, rebate, refund, commission, dis-
 29        count, or service between a distributor purchasing wine or  a  distributor
 30        purchasing other products;
 31        (d)  To  threaten any distributor with any discrimination prohibited under
 32        subsection (1)(c) of this section, with the purpose or effect of  changing
 33        or maintaining resale prices of the vintner, winery, importer or dealer;
 34        (e)  To  impose  conditions or restrictions on a distributor not generally
 35        imposed on other distributors; or
 36        (f)  To cause  a  termination,  cancellation,  nonrenewal  or  substantial
 37        change in competitive circumstances in the relationship with the distribu-
 38        tor  without  providing  at  least ninety (90) days' written notice of the
 39        termination, cancellation, nonrenewal or substantial change in competitive
 40        circumstances. The notice shall state all  the  reasons  for  termination,
 41        cancellation,  nonrenewal  or  substantial  change  in competitive circum-
 42        stances and shall provide that the distributor has ninety (90)  days  from
 43        the  date  of  receipt  by  said  distributor  of the vintner's, winery's,
                                                                        
                                           2
                                                                        
  1        importer's or dealer's notice in which to rectify any claimed  deficiency.
  2        If  the  deficiency is rectified within ninety (90) days, the notice shall
  3        be void.  The notice provisions of this section shall  not  apply  if  the
  4        reason  for  termination,  cancellation  or  nonrenewal is insolvency, the
  5        occurrence of an assignment for the benefit of creditors,  or  bankruptcy.
  6        If  the  reason  for  termination, cancellation, nonrenewal or substantial
  7        change in competitive circumstances is nonpayment of sums due for the pur-
  8        chase of product, the distributor shall be entitled to written  notice  of
  9        such  default,  and  shall  have  twenty (20) days in which to remedy such
 10        default from the date of delivery or posting of such notice.
 11        (2)(a)  In the event that an agreement between a vintner, winery, importer
 12        or dealer (hereinafter referred to as "supplier")  and  a  distributor  is
 13        terminated,  canceled  or not renewed by a supplier, the distributor shall
 14        be entitled to reasonable compensation for the laid-in cost  to  the  dis-
 15        tributor  of the inventory of the supplier's products, including any taxes
 16        paid on the inventory by  the  distributor,  together  with  a  reasonable
 17        charge for handling of the products.
 18        (b)  In  addition  to  the  compensation provided in paragraph (a) of this
 19        subsection, if the agreement between a supplier and a distributor is  ter-
 20        minated,  canceled  or not renewed by a supplier in bad faith or for other
 21        than good cause, the distributor shall be entitled  to  compensation  from
 22        the supplier for:
 23             (i)   The  fair  market value of any and all assets, including ancil-
 24             lary businesses, relating to the transporting, storing  or  marketing
 25             of the supplier's products; and
 26             (ii)  The good will of the business.
 27        (c)  The  total  compensation  to  be paid by the supplier pursuant to the
 28        provisions of this subsection shall be reduced by any sum received by  the
 29        distributor  from the sale of assets of the business used in the distribu-
 30        tion of the supplier's products as well as the value such assets may  have
 31        to the distributor that are unrelated to the supplier's products.
 32        (d)  As  used  in  this  subsection, "fair market value" means the highest
 33        dollar amount at which a seller would be willing to sell and a buyer would
 34        be willing to buy those assets specified in paragraph (b)(i) of this  sub-
 35        section when both the seller and buyer possess all information relevant to
 36        the transaction.
 37        (3)  Nothing  in this section shall be deemed to prohibit vintners, winer-
 38    ies, importers or dealers from selecting their  own  customers  in  bona  fide
 39    transactions not in restraint of trade.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE
                                
                            RS 11027
                                

This proposal provides that in the event a vintner, winery,
importer or dealer terminates, cancels or refuses to renew a
distribution agreement with the wine distributor, the distributor
shall be entitled to reasonable compensation for the value of the
inventory, including taxes paid by the distributor on the inventory
and a reasonable charge for handling the products.  If the
termination agreement is in bad faith or for reasons other than
good cause, the proposal permits the distributor to recover the
value of the good will of the business being terminated together
with the fair market value of business assets used in transporting,
storing or marketing the products, less the value such assets may
have to the distributor that are unrelated to the supplier's
business.
                    
                          FISCAL NOTE
There is no fiscal impact associated with this legislation

     CONTACT:  Bill Roden
                    Jeremy Pisca
     
          Idaho Beer & Wine Distributors Assn.
          (208) 336-7930 

STATEMENT OF PURPOSE/FISCAL NOTE                       H 23